Buy, rehab, rent, refinance, repeat. The first three steps are within your control. The fourth is not, which is why it should be underwritten first.
The refinance is the whole strategy
If the finished property does not appraise where you expected, or will not support the debt service, your capital stays trapped in the deal and the model stops working.
So the question to answer before you buy is not "can I renovate this" but "what will a lender lend against this once I have".
Appraised value, not your basis
Lenders lend against appraised value after a seasoning period, not against what you spent. Money spent on things an appraiser does not credit — an over-specified kitchen in a rental market, or work that is invisible — does not come back.
Renovate to the standard the comparable set supports. In most South and West Side markets that is solid and clean rather than high-end.
Debt service coverage
Most investor refinance products size the loan on the property's income relative to its debt service. Rents that are optimistic on paper do not survive that test.
Underwrite on rents you can actually evidence from comparable units nearby, not neighborhood averages, and remember taxes and insurance sit inside that calculation.
The Chicago specifics
Establish the legal unit count before you buy. A basement unit that is not legal does not count toward income for lending purposes, however well it rents.
Cook County taxes can move materially after a sale and reassessment. A tax line underwritten at the previous owner's figure is one of the more common ways a BRRRR goes wrong here.
Separately metered utilities materially improve the operating numbers on small multifamily, and single-boiler buildings are common in the older stock.
Where it works well
Markets with genuine rental demand and a stock of buildings that can be brought to a lettable standard at a sensible cost — West Garfield Park, parts of Austin and North Lawndale, and the South Side multifamily corridors.
Our market pages describe the housing stock in each, which is the first input to this question.